Failure to prepare an adjustment at the end of the period to record an accrued expense would cause:

Question

Quizplus · Accepted Answer

If an adjustment is not made to record an accrued expense, it means that the expense has not been recognized in the current period. As a result, expenses will be understated and net income will be overstated. Additionally, an accrued expense represents a liability that has not been paid yet, so not recording it will result in an understatement of liabilities.

Failure to Prepare an Adjustment at the End of the Period